Ethical gambling. Is it an oxymoron? A pie-in-the-sky delusion? Jason Trost argues passionately on our podcast,ProQuo Provokes, that peer-to-peer betting can offer punters a fair shake. As chief executive and founder of Smarkets, Jason has built a platform that facilitates bets on hundreds of markets every day. To date, Smarkets has transacted over £8 billion worth of bets since launching in 2010 - and is now among the fastest-growing companies in Europe.
During our conversation, Jason and I started at the beginning. He shared how he, a product of American culture that enshrines entrepreneurialism, always wanted to be the next Bill Gates or Steve Jobs. At the conclusion of his computer science education, however, he found himself at UBS as a trader - he found the interface on which he traded to be confusing and difficult to work with. This spurred him on his own path, creating new software that UBS adopted as an interface, designed specifically for the global asset management division.
When Jason struck out on his own, he ended up in London and identified the ideal market to disrupt... sports betting. As at UBS, he realized that betting could be facilitated with a better interface. It was during this process that he brought about a new style of betting - one rooted in his financial career. As he explained to me, “the thing that sets us apart from every other betting company is that we don't view ourselves as a betting company. I always viewed what we do as event trading, financial technology, if you will.”
This disruptive proposition, which he described as “cleaning up that old crusty industry and replacing it with good technology and customers getting a fair shake...Smarkets is understated, it's sleek, it's professional. It's not shouty like Ladbrokes… we’re a very pro-tech brand that is designed to be understated.”
To illustrate this point, amusingly, Jason told me that when asked what celebrity he thought could best embody the brand, he said Bruce Wayne. Why? “He is very understated, he knows what he's doing, he takes care of business - but he's almost anonymous, very powerful and proactive.”
But if Smarkets’ marriage of tech and betting was fortuitous, the timing of the company’s launch was anything but. Launching the company in 2007, when he was a mere 26 years old, Jason has grown up with his venture. On top of that earned maturity, starting a company in a recession means the challenges that COVID-19 has posed were not his first taste of global adversity. As Jason put it, “there are very strong parallels between the adversity of a recession and the adversity of a pandemic.”
It also means he has over a dozen years running a company with a more values-driven approach. To Jason, this means both scrutinizing the value of every dollar spent and being a “thrifty” company, as well as investing in employees’ wellbeing through subsidizing mental health care - which Jason admits is at a premium during the pandemic.
I naturally provoked Jason on the matter of ethics, saying I could hear listeners “squealing” in my ear about the issue of dependency on gambling. Jason’s counter centered around lowering the margins in betting: “I understand that a lot of people don't agree with this point of view, but what I would say is that when people have an issue with problem gambling, they forget the fact that price should be part of the argument. People treat it more as a negative behavior and the negative behavior in my opinion, only comes from price. So to me, the best way to fix problem gambling is to focus on making betting as low margin as possible. So for argument's sake, going back to that coin toss, if you could have zero margin betting it would be hard because how would you make money? But if you could have zero-margin betting, I don't think anybody would have a problem with people spending too much time betting because over time people wouldn't lose money, they would just lose time.”
Jason has turned this sort of values-led scrutiny on himself, too. As we wound down the conversation, Jason spoke about his own management style and how it has shifted over time. He began, he admitted, as a sort of tech Bobby Knight - he shared that “the biggest change I've realized in my career is the old school way of managing people. I've started to pivot to supporting people, rather than an aggressive sports coach kind of model… to more of an ‘Oprah’ - somebody that listens to you, wants the best for you and is here to help you on your personal journey.”